Aereo: Okay, Fine, If You Say We Look Like A Duck, We'll Quack Like A Duck

from the let's-pay-up dept

In the wake of the Aereo ruling, I'd been meaning to do a post questioning whether or not the ruling had effectively overturned the ruling in the ivi case from a few years earlier. We had seen some people in our comments point out that, following the Aereo ruling, Aereo had an easy solution: just start paying retransmission fees. Except... that's exactly what ivi had tried to do, and the court had shut them down, using almost the opposite reasoning as the Supreme Court. Specifically, the Second Circuit appeals court (the same that had decided in Aereo's favor) ruled that internet services were not cable companies under the law, and couldn't just pay retrans fees:

Congress did not, however, intend for Section 111's
compulsory license to extend to Internet transmissions.
Indeed, the legislative history indicates that if Congress
had intended to extend Section 111's compulsory license to
Internet retransmissions, it would have done so expressly --
either through the language of Section 111 as it did for microwave
retransmissions or by codifying a separate statutory
provision as it did for satellite carriers. See 17 U.S.C.
§§ 111, 119.

Extending Section 111's compulsory license to Internet
retransmissions, moreover, would not fulfill or further
Congress's statutory purpose. Internet retransmission
services are not seeking to address issues of reception and
remote access to over-the-air television signals. They
provide not a local but a nationwide (arguably
international) service.

Accordingly, we conclude that Congress did not
intend for Section 111's compulsory license to extend to Internet retransmissions.

So, uh, which is it? Aereo has now decided that if the Supreme Court is going to call it a duck for looking like a duck, it's damn well going to quack like a duck too. It has told the lower court that it intends to pay retransmission fees under Section 111, more or less claiming directly that the Supreme Court overruled the ivi ruling. For what it's worth, Aereo's "wacky" (but seriously questionable) "competitor" FilmOn, already made a similar declaration of being a cable company, though as we've learned with FilmOn, you should take almost every claim it makes with a huge grain of salt.

Of course, this is a big problem with the Supreme Court's ruling. By coming up with this wacky "looks like a duck" test, it's encouraging companies like Aereo to use that test in a variety of ways, even though copyright law has never worked that way. Lots of things that "look like" each other face different rules: think of terrestrial radio and internet radio stations. Under the "looks like a duck" test, internet radio stations should be able to declare themselves the same as terrestrial radio stations and stop having to pay performance fees to musicians.

And, of course, the networks themselves don't like Aereo embracing the duck, even though the company is only doing so because of the network's own lawsuit.

On July 1, however, its counsel suggested that Aereo has rethought its entire legal strategy and will raise before this Court a brand new defense based on Section 111 of the Copyright Act. Aereo never before pled (much less litigated) Section 111 as an affirmative defense. Whatever Aereo may say about its rationale for raising it now, it is astonishing for Aereo to contend the Supreme Court’s decision automatically transformed Aereo into a “cable system” under Section 111 given its prior statements to this Court and the Supreme Court.

But it's not Aereo that made that decision. It's pretty clearly the Supreme Court and its stupid "looks like a duck" test. The entertainment industry might want to be careful what it wishes for. It applauded the dreadful looks like a duck test, and now it's freaking out when Aereo actually tries to apply it.

Summarizing: we want Aereo out of business doesn't matter if they pay retransmission fees. Damned if you follow the law, damned if you don't just as we've been saying. I wonder if the broadcasters just created a massive monster? Imagine if Aereo decides to start an online "cable TV" business that offers channels on demand while replacing advertisements with their own? This would be one huge punch in the balls of the broadcasters. And if I were Aereo I'd start lobbying to end those fees with the money.

Re: Re:

Congress should just codify into the law that only incumbent interests get considered by our legal system. The job of the courts is to settle disputes among incumbents (ie: broadcasters and cable companies) with no consideration to the public interest. Whenever an incumbent wants something they always substantially get what they want. The courts may find some twisted logic to argue that what the incumbents want is in the public interest but the end result is that incumbents substantially get what they want always. They ask and they receive.

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Collateral Damage?

Interesting idea that the "duck test" could have a lot of collateral damage the media industries didn’t believe would happen. While certainly not settled, I’m hopeful that more companies can use the ruling — as Mike pointed out — for other matters besides streaming radio. I’m sure there will be some inventive person or company who’ll test the test, so to speak, and build a service that consumers value.

Maybe we'll get lucky and this will make it to the Supreme Court and they'll overturn the Aereo ruling in a good way just to avoid having to explain why Aereo isn't a cable company even though they just got done ruling that Aereo is a cable company.

Alternatively the courts could end up agreeing that yes, the Aereo ruling overturned the ivi related rulings, which wouldn't be all that bad of a thing either.

"Your honor, we'd only like Aereo to be treated like a cable company when it suits us, and then not treated like one when it doesn't. Much like how Verizon wants to be under Title II for subsidies. But not for anything else. See, we've got precendent!"

Let's Recap

1. Court issues ruling that says you violate law if you do X, Y, and Z.

2. Aero sets up it's service so it specifically avoids doing X, Y, and Z.

3. Aero is sued anyway, on basis of "they are intentionally avoiding liability!"

4. Supreme Court buys the argument, says "If they act like a duck, they are a duck" without much (if any) law behind it.

5. Aero fully embraces what "acting like a duck" means and takes full advantage.

6. Cable companies will complain, saying that they are specifically taking advantage of the law AGAIN. In essence, their argument is: Aero is Schrödinger's Company. Somewhere in between Cable company and internet company. Which they are depends on the observer.

Should this end up before The Supreme Court then i can't wait to see how they will twist themselves into a pretzel to rule that yes Aero looks like a duck so therefore must be a duck and yes they don't look like a duck either. It will be most interesting how they try not to contradict themselves.

prettymuch

This is pretty much where I figured they would end up going: If we are a cable company, then let us negotiate like one. It is a wonderful attempt to use the SCOTUS ruling is a way that nobody would intend them to do.

The problems that this defense opens up are probably bigger than they want to face. There is the whole question of the regulatory frame work of the cable industry, it's obligations in the communities they serve, and so on.

I could also see that before any channel would enter into an agreement for redistribution that they would require that the location of the end view be more clearly confirmed. That is to say avoiding having Aereo become a method for obtaining signals not available in your area by use various means to circumvent restrictions.

Moreover, there could also be the question of carriage. Would comcast be required to provide connectivity for a direct competitor? Would they and others be in their rights to either block out Aereo completely or require an additional licensing fee per user to access their customers? I am not talking net neutrality here, I am talking one cable company versus another. Are they required to offer them last mile service for free?

Then you get into the question of price. Where does Aereo the cable company land on pricing? Do they end up back at the levels of basic cable, and pretty much price themselves out of the market?

Yes,there are monies and subsidies out there. However, they may be entirely outweighed by real world concerns that could kill the entire process.

Re: Re: prettymuch

Re: prettymuch

There is the whole question of the regulatory frame work of the cable industry, it's obligations in the communities they serve, and so on.

So? They worked to set up their business in a way that would keep them away of such market but were forced into it. Are you implying they will again be doing something wrong by acting within the law and this decision? Again?

That is to say avoiding having Aereo become a method for obtaining signals not available in your area by use various means to circumvent restrictions.

Not if they follow such restrictions or pay proper licenses to offer such channels internationally. Admit it, your bosses fear Aereo will dethrone them using their own stupid ruling. Which would be awesome. It's about time cable evolved into a fully interactive experience. Hopefully Netflix will join Aereo just because they can.

Would comcast be required to provide connectivity for a direct competitor? [...] I am not talking net neutrality here, I am talking one cable company versus another.

It is Net Neutrality. Deliberately throttling or blocking them is unfair competition because Comcast happens to hold both the cable company and the ISP. Companies on other sectors have been punished for unfair practices. Which is one reason I believe they should be forced to split (cable/isp).

they may be entirely outweighed by real world concerns that could kill the entire process

Real world concerns or market capture, regulatory abuse etc etc etc? I expect every single wrongdoing from the likes of Comcast, Verizon etc.

Re: prettymuch

"It is a wonderful attempt to use the SCOTUS ruling is a way that nobody would intend them to do."

So you just want incumbent players to have it both ways. You want them to get the best of both worlds. And I'm expected to believe you aren't just a shill with no moral conscience? Really? Very hard to believe. Very hard for me to believe you can even look yourself in the mirror with a clear conscience. The likes of you are the scum of the earth.

As far as "nobody would intend them to" what is your definition of 'somebody'? The existing incumbents? The public? Oh wait, that's right, the public are just a bunch of nobodies that the legal system shouldn't even consider. You and your bought and paid for opinion is the only somebody.

You want to call them a cable company without giving them the benefits that a cable company would get. You want to give them the worst of all worlds.

"The problems that this defense opens up are probably bigger than they want to face."

There is only one problem and it's that our legal system is bought and paid for by incumbent players. That's the only problem. Everything else is just a legal technicality.

"There is the whole question of the regulatory frame work of the cable industry, it's obligations in the communities they serve, and so on."

Hah!! They serve the community? Or do they just scam the community and milk it dry. What alleged obligations? The ones that they must serve parts of a community that they would have served regardless, like requiring them to serve areas they are likely to serve anyways and possibly having local governments cut out exceptions to areas they won't otherwise serve? and even if they wouldn't serve certain areas unless compelled to (which is nonsense) they wouldn't enter a community unless it were profitable. It's not like they are going to lose money. But the key point is that competitors are not allowed to compete even if they are bound by those same requirements and the reason is because these requirements are just a red herring to give us a false excuse to justify their govt. established monopoly position that they shouldn't have.

"I could also see that before any channel would enter into an agreement for redistribution that they would require that the location of the end view be more clearly confirmed. That is to say avoiding having Aereo become a method for obtaining signals not available in your area by use various means to circumvent restrictions."

Yes, because broadcasters are somehow entitled to have the government provide them with a special business model instead of making them compete in a free market like everyone else. Oh, I know how they are entitled to this. They bought and paid for our legal system.

Get this through your thick head you morally bankrupt shill. Broadcasters are not entitled to have exclusive privileges on broadcasting spectra. They are not entitled to prohibit me from broadcasting on those same spectra. If the government wants to regulate broadcasting spectra it should only be for non-commercial purposes to benefit the public (ie: things like GPS and emergency broadcasting are two valid examples that come to mind). It's bad enough that they get a commercial monopoly on broadcasting spectra but, furthermore, they are not entitled to tell me what I can and can't do with that which crosses public property or the private property of others. Not only do they get a wrongfully granted monopoly on broadcasting spectra for their own personal commercial gain but, on top of that, they complain when someone does something with a signal that crosses public property and the private property of others that they don't like. This is wrong and shows just how deeply embedded corruption is in our system. That you still don't understand how wrong this is shows how morally bankrupt you are and I see absolutely no reason to even consider the opinion of a morally bankrupt shill.

"Would comcast be required to provide connectivity for a direct competitor? Would they and others be in their rights to either block out Aereo completely or require an additional licensing fee per user to access their customers? I am not talking net neutrality here, I am talking one cable company versus another. Are they required to offer them last mile service for free?"

As someone else pointed out you are absolutely discussing net neutrality. When I buy Comcast ISP they are acting as an ISP (to me) and not a cable company. That they happen to offer a competing service is no excuse for them to restrict the service that I am already paying for or to double dip and charge both me and the competing service provider an additional fee. I am already paying for the service being provided. Otherwise they can just offer their own instant messaging service and block alternative instant messaging services, they can offer their own blog service and block other blogs, they can offer their own E-Mail service and block G-mail and alternatives, and before you know it I am restricted only to what they offer at a huge premium rate. Net neutrality seeks to prevent that.

If Comcast had to compete in a free market then they can restrict what they want and I will just switch to a competitor. But since this is not a free market they should absolutely be compelled to provide me with the service I paid for and be neutral about the outside services they deliver.

"Then you get into the question of price. Where does Aereo the cable company land on pricing? Do they end up back at the levels of basic cable, and pretty much price themselves out of the market?"

Prices should be determined by the free market not by some government-industrial complex that writes laws to limit competition. Unfortunately right now we have the later.

"Yes,there are monies and subsidies out there. However, they may be entirely outweighed by real world concerns that could kill the entire process."

You haven't raised any real world concerns. The only concerns you raised are the concerns of incumbent players that don't want to compete in a free market because they want to scam the public. They want subsidies to build their infrastructure and then they don't deliver on their promises, essentially pocketing the subsidies, and then they overcharge the customer and provide them with poor service since they never used the subsidies they received to upgrade their infrastructure. and then when communities try to build their own ISP they lobby hard to block such efforts because they know darn well that allowing communities to the rightful freedom to build such services would ensure better service for a cheaper price. So, sure, there are real world concerns that kill the whole process, it's called politics. It's called bought and paid for politicians. It's called corruption. Those are the real world concerns. and I am concerned.

Re: Re: prettymuch

Re: Re: prettymuch

You want to call them a cable company without giving them the benefits that a cable company would get. You want to give them the worst of all worlds.

Far from it. I am actually looking at it and saying "okay, you want to set up a cable company in Boston. How do you do it?".

You and your bought and paid for opinion is the only somebody.

My opinion is not bought and paid for. Stop trolling.

Hah!! They serve the community? Or do they just scam the community and milk it dry.

One example in the cable world are community access channels. If (and I don't know the specific rules in play) this is a requirement of operating a cable system, would Aereo be forced to provide and operate it as others are required in the market place?

Get this through your thick head you morally bankrupt shill. Broadcasters are not entitled to have exclusive privileges on broadcasting spectra. They are not entitled to prohibit me from broadcasting on those same spectra.

Why so angry? Seriously I get the drift of your rant, but you missed the point. It's illegal to provide distant signals (those outside your area) in most cases. It's very likely that a "virtual" cable company like Aereo would be bound by the same rules, being a cable company after all. That would put them potentially in the position of having to know the actual location of their customers so that they do not violate the law. A customer from Boston travelling to Miami likely should not be able to watch Boston programming live, at least under the current laws.

As someone else pointed out you are absolutely discussing net neutrality. When I buy Comcast ISP they are acting as an ISP (to me) and not a cable company.

Yes, but should an ISP be compelled to be a final mile provider for a cable company? You have to think about it for a moment, because there are plenty of reasons to have concern here. Net neutrality says you deliver packets no matter what. However, Aereo wouldn't be an internet company, they would be a cable company. Shouldn't they have to rent the cables or install their own, as others in the market place must do? Should they be forced to pay a per subscriber fee for cable usage, as they would be if they rented / contracted for use of the final mile from a cable or phone company? Your arguments would make sense if they were just another internet service, but as soon as they become a cable company the whole way of dealing with the final mile issue changes.

The only concerns you raised are the concerns of incumbent players that don't want to compete in a free market because they want to scam the public.

No, it's called the real world. Back to the original question which is "okay, you want to set up a cable company in Boston. How do you do it?". Adding "on the internet" on the end of things doesn't make them special or suddenly grant them a free pass on fulfilling the obligations or operating in a manner consistent with their business. Getting a free ride online would pretty much be turning the business model inside out, and would likely lead to the incumbents doing the same thing.

Why maintain the physical cable system when you can just sponge off of the competitors in your marketplace to do your delivery for you? Perhaps cable companies as we know them could just get rid of their physical presence and count on the remaining sole provider (copper line phone companies) to provide their end connection to consumers. Line too slow? Blame the phone company and make them pay to make it fast enough. Let's go get that monopoly you always talked about started.

it's called politics. It's called bought and paid for politicians.

I think that's called your personal vendetta and whipping boy. That's a different problem. When all you have is an axe to grind, everything looks like a tree to chop down.

Re: Re: Re: Re: prettymuch

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"One example in the cable world are community access channels."

Which makes sense in the context of a cable company that has a government established local monopoly. The local monopoly prevents communities from providing their own community access channels so the very least the cable company can do to make up for it is to distribute such channels. This doesn't really apply to Aereo though.

"Seriously I get the drift of your rant, but you missed the point. It's illegal to provide distant signals (those outside your area) in most cases. "

If this is so then my problem is with the law. And you should likewise have a problem with the law if you are legitimately not a shill.

"A customer from Boston travelling to Miami likely should not be able to watch Boston programming live, at least under the current laws."

If true then the law should change and you should be advocating changing the law. This is another example of how the law (or how court rulings) is (are) bought and paid for.

"Yes, but should an ISP be compelled to be a final mile provider for a cable company?"

If it's a 'cable company' over the Internet sure, why not? Just because of some technicality in the law that the incumbents wrote into the law to serve their own purposes? That's no excuse to prevent competitors from entering the market and better serving consumers and the public. The government should be about serving the public interest and not about writing the laws that incumbents want so that the public gets scammed.

"You have to think about it for a moment, because there are plenty of reasons to have concern here."

Absolutely, the concern is that the law is broken and seeks to serve those that wrote it, incumbent businesses.

" However, Aereo wouldn't be an internet company, they would be a cable company. Shouldn't they have to rent the cables or install their own, as others in the market place must do?"

If others in the market place want to provide their cable service over the Internet they should likewise be free to do so.

"Your arguments would make sense if they were just another internet service, but as soon as they become a cable company the whole way of dealing with the final mile issue changes."

Only because incumbent players have written contorted self serving laws. This should not be the case. Otherwise the law can just permit 'cable providers' from providing service over the Internet.

"Adding "on the internet" on the end of things doesn't make them special or suddenly grant them a free pass on fulfilling the obligations or operating in a manner consistent with their business."

Some of the obligations are self serving (ie: not allowing broadcasting from one location to be viewed in another) and self serving laws should not exist. Laws should serve the public interest. The other obligation you mention (about local access channels) doesn't really apply to Aereo since that obligation is to partially correct the fact that cable companies have a wrongfully granted local monopoly in the first place and that local monopoly can be used to otherwise stifle local channels.

"Getting a free ride online would pretty much be turning the business model inside out, and would likely lead to the incumbents doing the same thing. "

It's not a 'free ride'. I don't think that word means what you think it means. Anyone else, including the incumbents, should be perfectly allowed to offer their service over the Internet. It's simply competing in a free market. A 'free ride' is what incumbents get when government wrongfully grants them broadcasting and cableco monopolies giving them exclusive privileges that not everyone else gets. That's a free ride. and for you not to recognize the true definition here tells me you are bought and paid for and morally bankrupt. ISP's with a regional monopoly should absolutely be regulated to be neutral to 'cable companies' or whatever that wishes to direct their traffic through the Internet. It's bad enough they have local monopolies they shouldn't even have in the first place. For them to be allowed to abuse such a position is even more unacceptable. Their position is indefensible and for you not to acknowledge this is intellectually dishonest.

"Why maintain the physical cable system when you can just sponge off of the competitors in your marketplace to do your delivery for you?"

I don't care if they get rid of their cable system. They are not entitled to maintain their cable system. They are free to allow a competitor to enter the market and to stop lobbying local governments to prevent competitors. But as an ISP that benefits from government established regional monopolies they should absolutely be neutral about the traffic they deliver. Whether that traffic is originating from a another 'cable company' or 'internet provider' or whatever the heck the law wants to call it the point is that a not bought and paid for law should allow for it. Unfortunately our laws are bought and paid for.

"Perhaps cable companies as we know them could just get rid of their physical presence and count on the remaining sole provider (copper line phone companies) to provide their end connection to consumers. Line too slow? Blame the phone company and make them pay to make it fast enough. Let's go get that monopoly you always talked about started."

Or perhaps better yet governments should allow competitors to enter the market and/or allow communities to build their own broadband. Then we can have better service for a cheaper price like they have in other parts of the world instead of constantly getting scammed.

"I think that's called your personal vendetta and whipping boy. That's a different problem. When all you have is an axe to grind, everything looks like a tree to chop down."

I do have a vendetta against corrupt politics. and so do many others. Politics in this country is corrupt and it's hindering progress at public expense just to enrich the worthless incumbents. That you're a paid shill doesn't change this.

Re: prettymuch

" It is a wonderful attempt to use the SCOTUS ruling is a way that nobody would intend them to do."

and just what is the intent here? To ensure that the public is fully scammed? To ensure that the incumbents get everything they ask for and don't have to compete in a free market? To ensure that the incumbents can fully milk everyone else including the public without worrying about competition? Is that the intent? Because it sure looks like it. And you sure look like a shill.

I would love it if Aereo produced a document from a year ago or so that showed that this was their plan all along knowing full well that the Roberts Court would knee jerk react to protect big business thus opening up a SOTC override of the retrans decision.

Re: Can I now get New York channels in Vancouver?

I think Aereo *chose* only to service the same areas the signals traveled, probably because of the ivi ruling.

But I agree, assuming the district court doesn't have kittens (even though the broadcasters are going to), this could enable Aereo to offer service everywhere, and let them do away with all the individualized antennas.

Re: Can I now get New York channels in Vancouver?

No, and this is the key difference between this case and the ivi case - ivi was region-agnostic (i.e. you could get any channel over the internet). Aereo, on the other hand, onyl allows for those channels in that region.

Re: Still a little confused

No.

The rules are already set, and it is a single set of rules. If the court rules that Aereo is covered under section 111, they have all of the same rules and rights associated with retransmission that a cable company has.

One of the nice side-effects would be that they can retransmit outside of the original signal range - opening up Aereo to be able to offer NY channels to someone in another state.

Damned if you do, damned if you don't

"Whatever Aereo may say about its rationale for raising it now, it is astonishing for Aereo to contend the Supreme Court’s decision automatically transformed Aereo into a “cable system” under Section 111 given its prior statements to this Court and the Supreme Court."

So, Aereo can't retransmit a signal without paying a fee because it's effectively the same as a cable service, yet it also can't retransmit a signal by paying a fee because it's not a cable service? So much for the pretense of this being anything other than a deliberate attempt to kill a disruptive technology.

Maybe SCOTUS not so dumb?

I wondered if this wouldn't be the case, because I had a vague recollection it was previously set in law that the cable companies did not need permission to retransmit. They merely had to pay a retransmission fee.

Sure enough, guess what Aereo is arguing now.

Some have suggested the SCOTUS was being idiotic with it's "quacks like a duck" test. I'm not so sure. Suppose this sticks: Then SCOTUS basically gave the best of both worlds to Aereo and the TV stations; Aereo gets to keep on doing business (likely with one lonely antenna now instead of a swarm) but has to pay; the TV stations can't make Aereo go away, but get paid instead of watching Aereo take their content without payment.

If that leaves both sides a little unhappy, well, the best compromises often do.

Cable companies must be shaking in their boots at the thought of losing their regional monopolies on TV delivery. If Aereo can be a cable company, then so can any other ISP. Cable companies don't want competition. Should Aereo win this upcoming round, you can be sure the cable companies' next move will be to redouble their efforts at killing net neutrality, because they simply can't abide competition.

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"Cable companies must be shaking in their boots at the thought of losing their regional monopolies on TV delivery. If Aereo can be a cable company, then so can any other ISP."

I think this misses the point. You no longer HAVE to be an ISP in order to be a cable company.

THIS is why cable companies should be shaking -- if Aereo pulls this off, ANYONE with sufficient funds can be a cable company, and there will be nothing Comcast, et al., can do about it without being hit with an antitrust suit.

This isn't necessarily a good thing for Aereo, btw. What happens when Google or Netflix decides to go into the cable business? Suddenly, Aereo will be outclasses, because their infrastructure is set up for something else, and they don't have billions just sitting around.

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HIS is why cable companies should be shaking -- if Aereo pulls this off, ANYONE with sufficient funds can be a cable company, and there will be nothing Comcast, et al., can do about it without being hit with an antitrust suit.

Not clear here. There would be the question of delivery method. If you wanted to start a cable company in the normal way, you would either install your own cables in the final mile or rent the existing wires to do the same. It's not clear that an internet based service would be able to be operate without having to compensate for use of the final mile.

Moreover, the shift to IP based TV delivery would be one that one spell disaster for existing ISPs. If you think the Netflix thing was an issue, imagine what it looks like when every other household in town is getting their TV over the internet. The bandwidth requirements to do this are insanely high, and constant on top of that. Real HD (anywhere from 4 meg to 10 meg a second) is beyond the service levels of most internet users, and would certainly tax existing networks to the point of breaking them.

You can also figure out that with anything less than unlimited bandwidth, internet TV would be a pretty big loser of an idea.

It's not as simple as you think, and it's not exactly fair to pass on the costs of delivery to your competitors.

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It's not as simple as you think, and it's not exactly fair to pass on the costs of delivery to your competitors.

While I agree it may not be simple, it's definitely not passing on the costs of delivery - any content provider has to pay for a peering connection with enough bandwidth to provide whatever quality of connection they're trying to offer. That is, they are paying for their own costs of delivery.

I know you're trying to suggest that the last-mile ISP is unfairly bearing the burden of carrying that traffic (as well), but as has already been discussed in other articles, that ISP is advertising a service at a particular level to its own clients, and it has a burden to provide that service no matter where its clients are requesting data from. The ISP accepted the burden of that traffic the moment it sold the promise of connectivity to its clients.

And in the case of simulcast retransmission, the data burden is actually much lower than for on-demand transmission if the ISP supports the right multicast protocols.

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On the converse, if your logic was to be taken literally, then it applies just as much to all other services as well.

If you start an internet newspaper, you need to use the ISP as a last-mile delivery to your customers. If you start an online e-book store, heck, even the apple iTunes store uses the ISP's cables for last-mile delivery to their customers!

The point is, this is not how the internet has worked (to date). That's not to say that the internet will never work like this, but for the most part the current (soon previous?) model has been implicitly very supportive of innovation and progress and has not placed unfair burden on any particular player in the market.

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that ISP is advertising a service at a particular level to its own clients, and it has a burden to provide that service no matter where its clients are requesting data from.

I agree. However, people do seem to confuse "up to" with actual full bandwidth 24 hours per day 100% usage. It's why bandwidth caps are more common than most people would like, because peak speed doesn't equate to endless supplies of bandwidth.

I honestly don't think that most ISPs could handle customers demanding 4 - 10meg a second for TV 18 hours per day, or more so during that already peak time 4 pm until bedtime. Remember that the average American sees about 2meg a second as their max connection speed. It's not clear that the internet is ready to handle this stuff.

Multicast may be an answer, but may not be as good when it comes to video. It would also mean that they would have to multicast every channel at all times, which in itself would create a certain amount of network problems. 5 meg a second average, times say 50 channels, and suddenly you need nearly a gig switch just to pass TV data around for ONE new service. Add a more new players to the game, and it's an outright fail at this point.

Remember that when ISP types offer IPtv, they generally do it by bringing a signal all the way to the local head end, and then using dedicated bandwidth to deliver the TV signal the last mile to each customer. They use dedicated connections and a form of multicast to get the channels to the head end. They are not streaming it through the full network, that would be a huge burden and doesn't scale very well.

I am thinking that at least for now, the internet isn't ready for that many people viewing TV in this manner.

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However, people do seem to confuse "up to" with actual full bandwidth 24 hours per day 100% usage.

That's what was sold to them. I used to be a heavy user a while back when 128kbits was considered broadband. I literally maxed my connection 24/7. And yet nobody complained at the time. The ISPs started complaining when the majority of the people started effectively using the bandwidth they were sold.

because peak speed doesn't equate to endless supplies of bandwidth

Then why they sold it with no restrictions? Data caps serve no purpose. If everybody decides to use that cap at the same time to the full extent of their speed there will be congestion if that's truly the issue. Sell lower speeds or don't sell at all.

I honestly don't think that most ISPs could handle customers demanding 4 - 10meg a second for TV 18 hours per day

Yes they can, unless they sell more than they can handle. And you need at about 5mbit for a decent steam, that's less than a Mb/s. What they could do and it would be fair is to charge more for peak times much like electricity distributors do.

They are not streaming it through the full network, that would be a huge burden and doesn't scale very well.

Most ISPs have local caching for frequently accessed files such as Youtube videos and stuff. If a channel is really popular then multicasting is an option as well.

The Internet managed Napster when it cam, the Internet managed torrents when they cam, the Internet managed High Def when it came, the Internet managed Netflix when it came. If they keep investing in infra-structure instead of just racking up all profits things will be fine.

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"I know you're trying to suggest that the last-mile ISP is unfairly bearing the burden of carrying that traffic (as well), but as has already been discussed in other articles, that ISP is advertising a service at a particular level to its own clients, and it has a burden to provide that service no matter where its clients are requesting data from. The ISP accepted the burden of that traffic the moment it sold the promise of connectivity to its clients."

His argument is so perverse it's mind boggling. and it's not like the fallacy in his argument hasn't been explained to him. It's been explained to him over and over and over and yet, like the dishonest shill he is, he keeps repeating the same dishonest argument over and over. Does this guy not have any common sense to know how bad this makes him look?

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It's not clear that an internet based service would be able to be operate without having to compensate for use of the final mile.

As most cable companies usually have a local monopoly on providing last mile services, you are saying that they should be able to use this to pile charges on the competition, so that either or both of the following outcomes occur:-1) They protect their cable TV business or replace lost subscriptions by charging the competitors.2) They keep raising their charges to competitors until they go out of business.

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No, actually I am thinking that the question of the last mile is very much unresolved.

I am thinking of the example in Canada of ISPs. Bell has been forced by law to sell (at a set rate) last mile services to other ISPs. Basically, a rate is created to offer them the space to operate in.

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Actually the resolution in Canada that you mention looks like a half decent resolution. It may not be the 'resolution' that the incumbents and bought shills (such as yourself) want but that doesn't make it a bad resolution.

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"It's not clear that an internet based service would be able to be operate without having to compensate for use of the final mile."

You stupid dishonest shill. When I pay my ISP to provide me with the service I request, be it 'cable service' over the Internet or whatever the heck you or the law wants to personally call it, the ISP should deliver what I, the consumer, already paid for. I already paid for it. and if they don't want to be neutral about providing me what I paid for then they can stop buying our politicians to prevent competitors from entering the market and the bought and paid for government could allow competitors to enter the market or they can allow communities to build their own broadband service.

I hope we get to see a judge declare that Aereo is simultaneously a cable company and not a cable company. American corruption is so hilariously incompetent. They're like the bumbling bad guys in cartoons that you aren't supposed to take seriously, except they're in real life and somehow they've taken over the world.

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I imagine if they push it it could very well end up before the SC again, as the broadcasters will now argue that despite the SC saying they are like a cable company, and therefor must act like one, that doesn't mean they are a cable company, and able to take advantage of compulsory licensing.

Given all but one(I believe) of the court cases Aereo was in before they hit the SC went for them, I'd say they've got pretty good odds of history repeating here. Broadcasters sue, Aereo takes it to court, Aereo wins. Broadcasters sue again, Aerea takes it to court again, Aereo wins again. All the way back up to the SC, again.

New reason to sue Aereo...Your honor Aereo announced that "if it quacks like a duck then it is a duck..therefore we are ducks"...I therefore put it to you that a goddamnned DUCK shouldn't be allowed to re-transmit TV signals.....

Careful what you wish for, you just might get it

Was wondering when the broadcasters' biggest fan/defender would show up.

Well considering the Supreme Court found that, under it's 'look like a duck' test, it basically is a cable company, they're simply following along.

You, and the broadcasters, are simply trying to have it both ways, where Aereo is a cable company with regards to what laws and rules they must follow, and not a cable company with regards to compulsory licensing and other 'perks'.

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"Aereo is already defeated because this will never fly."

Ignoring your language butchery, what's your rationale behind claiming this won't work when you've been saying all along this is what they should've done? If theypay the fees, they're no longer 'stealing' (your word) the content, so what's your problem now?

"Aereo is trying to get itself reclassified as a cable company because it couldn't survive as a copyright thief."

Anybody using the term "copyright thief" has convincingly demonstrated their ignorance of both copyright and theft.

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I was a vocal critic of Aereo and applauded the SCOTUS decision. I also was one of those who stated that Aereo should pay the retrans fees and reload.

I stand by that. If Aereo is paying the retrans fees that should satisfy the Court and it should be allowed to compete. I understand that its method of distribution creates headaches for regulators but frankly that is too bad. The Court said Aereo was for all intents and purposes a cable provider. If Aereo pays the same retrans fee, then it should continue to be regarded as such.

Dept. of Metaphor Enforcement

By coming up with this wacky "looks like a duck" test, ...

Mr. Masnick,

We here at the DME would like to lodge a formal complaint regarding the befowlment of your article with the word "wacky." Even an old coot or a loon can see that you were blind to the only adjective that holds water in this context: "daffy."

free rides

Barry Diller is not a dumb guy. He also is not out to kill the entertainment business. He knows the business better than anyone out there and is a force for evolution. It's frustrating when discussions of ISPs and retransmission and net neutrality fail to acknowledge the purpose of retransmission fees in the first place. In Hollywood, the payment system to the creative people behind entertaimnent programming -- writers, producers, actors, and in some cases below the line crew -- depends upon residuals that are calculated on sales of tickets or of of dvds, and each time a program is broadcast. Yes, cable companies are greedy, and yes, net neutrality should be enshrined in the constitution. BUT. Free retransmission -- whether through Pirate Bay or kimdotcom ventures or Aereo -- kills people's incomes, and on an industry-wide basis has resulted in massive job loss and impeded the ability to finance new projects. When a producer works for years to get a project made, and the cast and crew work for scale plus a backend deal, and the movie appears for free on Pirate Bay on the same day it comes out in theaters, nobody gets paid. When Aereo retransmits without paying fees, nobody gets paid residuals. It turns working professionals who used to make a good living into hobbyists who cannot pay mortgages. It makes financiers reluctant to fund new projects once they have been left holding the bag with no ROI.

Barry Diller may save Hollywood yet. If Aereo is a quacking duck and is therefore not only entitled but obligated to pay retransmission fees, it sets a structure for all cloud based retransmission to be so obligated. From there it' s just a short hop skip and jump to using technology (Intel already has some) to track viewing, toll retransmission fees and residuals from ISPs and other transmitors, and funnel the monies where they are supposed to go. No more free rides for new media, and the abolishment of the infamously detested Hollywood accounting practices.

Re: free rides

Free retransmission -- whether through Pirate Bay or kimdotcom ventures or Aereo -- kills people's incomes, and on an industry-wide basis has resulted in massive job loss and impeded the ability to finance new projects. When a producer works for years to get a project made, and the cast and crew work for scale plus a backend deal, and the movie appears for free on Pirate Bay on the same day it comes out in theaters, nobody gets paid.

So nobody has gotten paid for any movies in the past 10 years? The number of movies coming out of Hollywood must have plummeted sharply, and there have been massive layoffs too, and major movie studios going out of business, right?